Case Studies

Commercial Leasing

One of the most common value-add levers is the lease-up of inherited vacant space. Smart, focused leasing can move the needle on any investment. Below are four vignettes of notable lease-ups that drove value.

Troy, Michigan – We acquired a 160,000 square foot power center with several high-performing junior anchors. Despite their strong sales and a good location in an established market, the center was only 73% occupied and the seller was in a cotenancy violation with one of the junior anchor tenants. We swiftly leased the center to 98% occupied and cured the cotenancy violation. We used two other value-add levers: monetizing a portion of the parking lot by leasing to an electric car charging operation and selling off inherited pad sites at accretive cap rates. From acquisition to execution on the value-add plan to sell for an outstanding gain was approximately 2.5 years.

Naples, Florida – This unanchored 100,000-square-foot neighborhood shopping center was effectively less than 40% occupied upon acquisition. It was delivered to the market in the fallout of the global financial crisis, and an exceedingly slow lease-up caused the developer to be unable to refinance or sell the project. Within two years, we leased the project to 100% occupancy. Over ten years later, it remains fully leased with consistently growing rents.

Orlando, Florida – We acquired a two-story newly developed project that delivered at the wrong time – in the midst of the global financial crisis. The project totals 120,000 square feet, with ground-floor retail and second-floor office. At acquisition, much of the second floor office space was in raw, dark shell condition, and the project was approximately 50% leased. Within 2.5 years, we had leased the project to 100% occupancy, and over 10 years later, the project remains at full occupancy with growing rents.

Raleigh, North Carolina – At acquisition, this 65,000 square foot neighborhood center was approximately 40% occupied, with two of the vacancies being junior anchors. Within a month of acquisition, we signed a lease with a large fitness operator for the largest junior anchor availability, and we leased the project to 100% occupancy in under two years.

Retail: Parcelizing Existing Pad Sites and Monetizing Excess Land

Fort Myers, Florida – We acquired a grocery-anchored neighborhood center that came with several acres of undeveloped land, most of it roadside on a high-traffic road just off the interstate and highly appealing to pad site users. We signed build-to-suit leases with two national tenants, and we sold the final roadside parcel to a fast food franchisee. The remaining acreage alongside the center attracted interest from a fitness chain, and we sold that parcel to a preferred developer for the tenant. Finally, we amended the anchor lease to allow one final pad site roadside in an area that had been arbitrarily restricted in that lease. At acquisition, we had only proformaed monetizing the two build-to-suit parcels, so creating five points of value notably drove returns past expectations.

Chicago, Illinois – We acquired a portfolio of neighborhood and community centers, nearly all of which came with pad sites. We quickly struck a renewal with a high-performing bank tenant and sold it into the single tenant net lease market. That sale of one tenant space returned nearly 10% of the equity invested in the 90-tenant, five-center portfolio.

Fund Formation

We have been part of six fund formations, determining fund terms, target investor, and legal structure. We have crafted the narrative that would become the pitch deck and participated in countless investor pitches. And we have overseen the harvesting of subscription documents and the ongoing fund operations. If you are considering sponsoring a fund, let’s talk.